For the purposes of the scheme, R&D is a project which seeks to achieve an advance in overall knowledge or capability in science or technology through the resolution of scientific or technological uncertainty.
Innovation can apply to any sector where technical progress can be shown. This could involve development of anything from software through to business processes.
The burden is on your company to evidence ‘innovation’. However, the rules do not require you to evidence you have been successful in your R&D or to divulge how you are carrying out your activity. What is sought is the attempt at innovation against technical uncertainty.
Innovation of course means different things to different sectors. There is no bright-line test as to what innovation is.
Experience of the R&D tax credit scheme and what is likely to be accepted as innovation will be invaluable when assessing your eligibility under the scheme.
It becomes a matter of understanding HMRC’s stance on what is classed as ‘innovation’, and effectively documenting and presenting evidence to support your claim.
Often overlooked by UK companies, R&D tax relief can offer significant corporation tax savings on eligible expenditure. If your company is developing new products or improving its products or processes in some way, then this may qualify for HMRC R&D tax credits.
There is scope for making an R&D claim in any sector. Our R&D tax consultants can help you make the most of research and development tax credits.
At ETC Tax we are experienced in handling client’s claims from start to finish. If you need help with what qualifies as R&D, please get in touch.
